How you’d shop for insurance after health-care reform

Feb 26, 2010 10:04 AM

If health reform passes it will be much, much easier for individuals and small businesses to shop for health insurance.

Under the system we have now, if you want health insurance, you have to figure out who offers insurance in your area, get quotes for the various plans they’d offer, and then try to puzzle out what those plans would cover and what they wouldn’t. It would help to have a law degree or work as an actuary in the insurance field, because many plans are written to make you think you’re getting more coverage than you are. If you have a preexisting condition, you could be denied or charged more.

After health-care reform, you’d be able to shop in the heath care exchange, a sort of one-stop shop where you can compare plans. All the plans in this store would have to meet minimum requirements for coverage, so you won’t have to worry about getting stuck with a plan with loopholes and coverage exceptions that don’t actually cover you when you get sick. You couldn’t be charged more due to your gender or health status. You wouldn’t have to worry about your coverage being denied or restricted because of a pre-existing condition.

What might the exchange look like? It would probably look something like the Massachusetts insurance exchange, Health Connector. (You can browse it, but you’ll need to use a Massachusetts ZIP code to compare plans – I used a Boston code: 02210.)

Once you start shopping, it tells you how to qualify and apply for subsidies, see left. (I’ve used a fictional couple in their mid-to-late thirties, with a child.)

The family I invented would not qualify for subsidies, so they would have the choice of buying from multiple levels of coverage, similar to the Congressional plans.

Bronze plans have lower premiums, and higher out-of-pocket costs; whereas gold plans have higher premiums and lower out of pocket costs. For illustrative purposes, I’ll choose the mid-range silver plan for my fictional family:

When I choose the silver plan in Massachusetts, the plans are again divided into three categories. “Silver low” has the highest annual deductibles in the category, “silver high” has no deductible, and higher premiums; and “silver middle” is in between the two. Pretty intuitive. Due to state rules, none of the plans make doctor visits subject to the deductible – the Congressional plans will require all preventive services be fully covered. Having this commonality makes it easier to compare plans because there are fewer differences to keep track of.

I can choose a plan from each category and compare what they’ll cost me side by side:

I can also see what my co-pays would be for various services and specialists, and what kind of vision, drug, emergency, and many other aspects of coverage I get. And if I want to find out more, I can download the plan details.

Another example of how you’d shop for health insurance after health reform is the Federal Employees Health Benefits Program, where federal employees (including members of Congress) shop for their insurance. Follow the link and click on your state and you’ll see a list of plans that federal employees can choose from, along with detailed brochures, recent rates and policy changes.

The proposed national health reforms go a little further than the rules set up for Massachusetts. For one thing, plans will be required to show you an illustration of what out-of-pocket costs you would face under common medical scenarios before you buy. This will help consumers evaluate the total cost of their insurance purchase: premium plus their share of medical spending. Insurers will also have to provide enrollee satisfaction ratings, so you can see how other consumers liked their plans.

—Kevin McCarthy, associate editor

For more, see our consumer guide to health care reform.